Statement by Ambassador Zhang Yishan at 2nd Committee of 59th session of UNGA on Item 83 (b): International Financial System and Development and 83(c): External Debt Crisis and Development

(12 October 2004, New York)

2004/10/12

Mr. Chairman,

At the outset, I wish to thank the Secretary-General for his comprehensive report on world financial system and external debt. I would also like to thank the Secretariat for its explanatory remarks. At the same time, the Chinese delegation supports the statement of Qatar made on behalf of the Group of 77 and China.

Since the beginning of this year, the momentum of world economic recovery is more obvious. Most regions have witnessed faster economic growth rate than expected. The developing countries have registered marked economic progress. However, geopolitical uncertainties, sustained increase of oil prices, and back flow of world financial resources to developed countries have posed new challenges to world economy. Some developing countries, especially the LDCs, are faced with numerous difficulties, such as serious shortage of financial resources, continued deterioration of trade terms, and even internal conflicts. The gap between the rich and the poor in the world has thus been widened further.

At present, the developing countries are still weak in terms of their economic foundation and in fending off the adverse effects of risks. Their voices and representation are particularly insufficient in world financial organizations. In the process of economic globalization, these countries can easily become fuses and victims of financial crises. The history of recent financial crises and globalization has proved that the world financial system established over 50 years ago can no longer meet the current needs, and reforms must be conducted.

We are of the view that the international community should proceed from the view of interdependence, and vigorously promote world financial structural reform. In this respect, the United Nations should make full use of its influence in accelerating the process. The new world financial system should follow the principle of equality and mutual benefit, and reflect the extensiveness, openness, representation and effectiveness. It should give developing countries more extensive rights to participation and decision making in world financial affairs, and reduce their risks in the process of globalization. At the same time, world financial structural reform should not be limited to asking developing countries to improve their own financial systems and raise transparency. It should also supervise and achieve rational flow of world financial resources, establish effective crisis warning and handling mechanism. The international community should also help developing countries in capacity building and in strengthening financial institutes, so that they will be better prepared for the risks.

Mr. Chairman,

The debt problem has long remained an obstacle for the developing countries in their economic and social development. Though under the "Initiative of HIPCs", one thirds of HIPCs' debts have been exempted, the above countries still have a debt burden of about 90 billion US dollars. They are confronted with grave challenges in maintaining the sustainability of their long-term debts. Appropriate debt solution and reduced debt burden is an important precondition for developing countries and especially the LDCs to eradicate poverty and achieve economic development.

The debt problem of developing countries has profound historical and political reasons, and is directly linked with the unfair and unreasonable international economic order. While it is necessary to tackle the existing debt problems, it is more important to uproot the cause. The international community should provide the developing countries with practical assistance, so that they will free themselves from the vicious debt circle and achieve economic development. The developed countries, as the major creditor nations, should vigorously fulfill their commitments made in the Monterrey Consensus. New global monitory mechanism should focus on the implementation of Monterrey Consensus by developed countries. The international and regional agencies concerned should continue to help developing countries in capacity building through various forms. In providing policy guidance and financial assistance, multilateral agencies, instead of simply copying the mode of developed countries, should respect the special needs and implementation capacity of developing countries, and put forward feasible reform and development plans based on actual conditions.

Mr. Chairman,

The Chinese Government always attaches importance to the debt problem of developing countries. We have made enormous efforts within the framework of South-South cooperation. For example, China has adopted positive methods in "China-Africa Cooperation Forum" and "ASEAN 10 Plus 3". The Chinese Government has also pledged to gradually increase its assistance to Africa within the framework of "China-Africa Cooperation Forum", to lift tariff from some imported goods from LDCs in Africa, and to expand financial input into African Human Resources Development Fund. We are ready to continue to explore new ways with other countries to further reduce the debt burden of developing countries and contribute our share to common development of the international community.